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Credit Agreements/Contracts — Writing Requirement

The Missouri statute of frauds requires that certain contracts be in writing and signed by the party sought to be charged. Specifically, it requires that contracts for, among other things, an interest in real estate be in a signed writing. See 432.010, RSMo. This statute, however, is not the only statute requiring a writing.

Sections 432.045 and 432.047 collectively require that credit agreements be in writing. See Bailey v. Hawthorn Bank, 382 S.W.3d 84, 92 (Mo. Ct. App. 2012). Section 432.047 states that a “debtor may not maintain an action upon or a defense, regardless of legal theory in which it is based, in any way related to a credit agreement unless the credit agreement is in writing, provides for the payment of interest or other consideration, and sets forth the relevant terms and conditions.” A credit agreement is an “agreement to lend or forbear repayment of money, to otherwise extend credit, or to make any other financial accommodation.”

Section 432.047 significantly strengthened the writing requirement. Previously, equitable theories such as promissory estoppel were used to combat the writing requirement in 432.045. See Mika v. Central Bank of Kansas City, 122 S.W.3d 82 (Mo. Ct. App. 2003). With the broad provisions of section 432.047, though, Courts have found that the language indicates the legislature’s intent to bar claims in any way related to a credit agreement — unless it is in writing. Bancorpsouth Bank v. Properties, 349 S.W.3d 363 (Mo. Ct. App. 2011); see U.S. Bank National Ass’n v. Canny, 2011 WL 226965 (E.D. Mo. 2011) (“[t]he Missouri Credit Agreement Statute acts as a statute of frauds to protect banks from losing their right to enforce a loan according to the terms of the written loan documents, if they informally attempt to accommodate debtors”).

Given this, Courts will not enforce loan commitments or forbearance/credit agreements unless in writing. Do note, though, the statutes expressly provide that the writing requirement does not necessarily apply to credit agreements for “personal, family or household purposes.”

Contact us with questions pertaining to contracts, credit agreements, promissory notes or other issues.